Brought to you by Harbor Compliance:
If you’re thinking of starting your own business, you’ve got a lot of hard work ahead of you. From finding the best way to finance your startup to hiring the right people or taking care of all legal matters, the to-do list might seem never-ending.
But as a fresh entrepreneur, you already know that success doesn’t come overnight and you have to put in a lot of time and effort to reach your objectives. So hard work isn’t something that can scare you off.
However, courage and a proactive approach can only get you so far. If you’re planning on doing something, you have to do it the right way.
Which brings us to a very important aspect in the process of becoming a registered business and that is naming a registered agent for your business. So, let’s shed some light on the matter and see what registered agents are all about.
What Is a Registered Agent?
A registered agent is an individual or a company that acts like a point of contact for all legal notices your business receives. The agent will be in charge of receiving documents such as summonses, subpoenas, regulatory and tax notices, and all other types of legal correspondence on behalf of your business and pass them on to you.
You can also come across terms like resident agent, statutory agent, or agent for service of process, but they all refer to the same thing.
Just imagine you have to handle all these legal matters yourself, on top of all the tasks you have to fulfill on a daily basis. A registered agent, be it an individual or an entity, will take the load off your shoulders and keep you updated on every legal aspect that requires your attention.
The registered agent you appoint has to be based in the same state as the business they represent. For example, if you’re starting a business in California, you need to search for a California registered agent to represent your business in this state.
If you decide to expand your operations in other states, you’ll need to have a registered agent in every state. Your registered agent’s name and address are public, so everyone will know where to send legal correspondence.
Who Needs a Registered Agent?
It is required by law that all registered businesses, be it an LLC, a corporation, a partnership or any other type of formal business entity (except for self-employed individuals), designate a registered agent in the state where the business will run its operations. So, this is an important step to consider when you establish a business, regardless of your location.
If, for any reason, your agent’s name changes or they move to a different location, you have the obligation to inform the authorities by filing a form to update these details.
Keep in mind that different states have different legal requirements when it comes to choosing a registered agent, so you should know your local laws before naming a registered agent for your future company.
How Can Hiring a Registered Agent Benefit Your Business?
In most states, a registered agent can be either the director of the company, an attorney, an employee, or a third-party organization. That means you can serve as your own registered agent. But do you really want to take on yet another time-consuming task? Here are some good reasons to hire a registered agent instead:
An entrepreneur has to wear many hats and juggle countless tasks at the same time. However, no one can do everything on their own. A skilled entrepreneur knows that she has to work smarter, not harder, and learn how to delegate tasks.
If you want to save yourself the trouble of dealing with all the intricacies of the legal system and wasting precious time in the process, hiring a company to serve as your registered agent is a far better option. That way, you can focus on other aspects of running your business and let a professional manage all your legal correspondence.
Even if you know a thing or two about compliance requirements, there are things that might escape your attention. After all, this is not your area of expertise and you’ve got a million other things to do besides that. But you don’t want to risk penalties or dealing with legal issues because you weren’t aware of certain state requirements either.
Fortunately, a registered agent knows all the ins and outs of the system and can ensure full compliance for your business at all times, keeping your business out of trouble and providing peace of mind.
Maybe you’re running a home-based business and you don’t want everyone to know your home address. Or maybe you don’t want to risk being served with a Service of Process in front of your employees, or worse, when you’re in an important meeting with a client.
Working with a registered agent service provider will help you keep your legal matters private and avoid embarrassing situations.
Let’s say your schedule varies or you travel a lot and you’re not always in the office during business hours. That means you can’t serve as your own registered agent, since a registered agent has to be available during normal business hours to receive important legal correspondence.
Hiring a registered agent who is always ready to represent your business is much better than changing your work schedule to accommodate these requirements and compromising on business flexibility.
Doing Business in Different States
Sooner or later your business will grow (hopefully) and you might want to extend your operations to other states. Since the law requires you to have a registered agent in every state where you do business, you’ll need someone to act as your registered agent in your new locations.
A service provider can serve as your registered agent in several states, so your compliance needs will be covered no matter where you decide to expand.